“The pessimist complains about the wind; the optimist expects it to change;  the realist adjusts the sails.” William Arthur Ward

I was reminded of this brilliant principle last week when I spoke to one of  my business coaching clients. There can be no doubt that we are living in  interesting times…. the global financial crisis has impacted overall spending  and consumer sentiment – and this has hurt many small businesses around the  country. It’s no good hoping that circumstances will change – in order to  survive we all need to dig deep and find creative ways to work smarter not  harder.

Jim Collins, in his book, “Good to Great,” talks about this very interesting  paradox that he calls “The Stockdale Principle”. According to Collins, “you have  to be realistic about your current situation and yet, stay optimistic about the  future”.

General Stockdale was the highest ranking American prisoner of war in Hanoi,  Vietnam. Over the years he began to notice an interesting phenomenon – optimism  could in fact be a liability. His fellow prisoners (who were the eternal  optimists) constantly set themselves up for disappointment. They set huge  milestones – “we will be rescued by Christmas” – but those milestones came and  went year after year and with it… their will to live.

Conversely, the prisoners who looked at the painful day-to-day reality they  were in and channeled their energies to the right places survived. This is not  to say that the second group were pessimists but rather realists that maintained  an unwavering faith in the end game, and a commitment to survive despite the  brutal fact of their incarceration and torture over a period of years.

Here’s how Stockdale put it in his own words:
“I never lost faith in the  end of the story. I never doubted not only that I would get out, but also that I  would prevail in the end and turn the experience into the defining event of my  life, which, in retrospect, I would not trade.”

How many of us would look back on seven years of detention – with regular  torture, dismal living conditions and an uncertain future – as an experience we  would not trade? Do you regard the greatest obstacles or challenges in your life  as the defining moment that shaped who you are today or do you choose to look at  them as an excuse or reason why you have not achieved more?

Have you ever sat back and thought how this distinction between optimism  versus reality could apply to your business/career or your life in general?  Where in your life are you ignoring reality in favour of being optimistic and  missing a crucial opportunity to take action?

Take for example my business coaching client that I mentioned above. She has  an employee who doesn’t take responsibility for her actions, doesn’t pay  attention to details and is often defensive and reluctant to take direction and  feedback. This employee is negatively impacting the entire work environment as  everyone gets caught up in the drama of it all. My client doesn’t want to let  the employee go and is resisting doing what she knows that she must. She hopes  that it will somehow improve without any action on her part – she is now  learning the distinction between reality and optimism. When she sees the  difference for what it is, then and only then, will she become decisive and take  action.

Another area where it’s easy to be blinded by optimism is in the financial  arena. Do you have detailed financial reports, KPIs and cashflow forecasts in  place to drive your decision making or are you simply relying on your optimism  instead of reality? Failure to effectively plan in this area (especially in  these tough times) could lead to a cash crunch and the demise of your  business.

Take a moment today to examine your relationship to optimism, pessimism and  realism. Success belongs to those who operate from both sides of the Stockdale  Paradox. The key is balance – knowing when to accept reality and take  appropriate action AND never losing faith in the end of the story. If you can  walk this delicate line of balance and responsibility, you increase your odds of  making good decisions and this will lead to your inevitable success and  breakthrough results.

In life, we will all experience setbacks, disappointments, loss and  challenges. What separates successful people from the rest is how you deal with  those inevitable struggles. This is a very important distinction and it is what  divides the winners from the losers. You must never confuse faith that you will  prevail in the end – which is something that you can never afford to lose sight  of – with the discipline to confront the brutal facts and reality of your  current situation, whatever that might be.

Article Source: http://EzineArticles.com/2884021

If you are like most business owners, you went into business because you are  passionate about AND good at WHAT you do… and you wanted the autonomy and  financial freedom of owning your own business. You were probably thinking, “as  long as I am good at what I do, how hard can it be to make a decent living and  support my family?” And you have probably discovered that it is actually harder  than you thought.

Here’s the problem…

You may be one of the 97% of small business owners who discover that although  you work incredibly hard and your sales seem to be increasing each month, you  have little to show for it financially. Perhaps you are already doing well but  you are unsure how to accelerate your results or expand your business? Or you  may simply be wondering why you are struggling to pay the bills lately even  though your accountant says that you are making a good “profit”.

One of the biggest problems is that business owners often convince themselves  that being busy is what business is all about. And you tell yourself “as long as  I work hard and do my best, there is not much else that I can do”. Everyone  knows that we’re supposed to work smarter, not harder, but the challenge lies in  knowing HOW to do that. And in the meantime, you may have found it just seems  easier to do everything…just in case it’s important, or makes a  difference.

So, if you’re supposed to do less, HOW do you figure out what is critical or  what will have the biggest impact?

In a typical 8-9 hour day, what percentage of your time and effort has a  positive and tangible impact on your bottom line? Do you strategically plan what  you will focus your time on or do you just try to cover everything on your to-do  list plus whatever emergencies pop up? The bottom line is this, if you cannot  read and understand your financials, it is difficult for you to say for sure WHY  your business is not as successful as you would like it to be. You may think it  is due to the fact that you don’t have enough customers or sales but you could  be missing the point completely. In fact, most of the businesses don’t need more  customers, they need more cash flow. And cash flow issues can often be fixed  without spending a dime on marketing.

And here’s the best part… all of the answers you need are sitting right  there in YOUR financial statements. You just need to learn how to unlock the  insights and use them to your advantage.

Every day that you put off learning how to unlock the insights in your  financials means that you are wasting at least 2-3 hours a day on tasks that are  not improving your bottom line. In fact, it could be the sole reason you are not  as successful as you would like to be.

This bad habit you have developed -of working way too hard and assuming that  success is somehow linked to the amount (not the quality) of work, will take  time to break.

Unfortunately, there are no quick fixes when it comes to breaking or  establishing new habits. In the 1960’s a highly regarded plastic surgeon, Dr.  Maxwell Maltz discovered that it took 21 days for amputees to cease feeling  phantom sensations in their amputated limb. From further observations and  significant research he established that it takes 21 days to create a new habit.  This part of the brain, the limbic system, is a slow learner.

Brain circuits take engrams (“memory traces”) and produce neuro-connections  and neuro-pathways only if they are bombarded with new information for 21 days  in a row. This means that our brain does not accept new data or information for  a change of habit unless it is repeated each day (without fail) for at least 21  days. Changing habits (whether positive or negative) can be done, but it takes  time and consistent effort.

Do yourself a favour and identify just one or two steps that you can take  each day that will enable you understand what your financial statements are  trying to tell you. Make a plan on paper – specific decisions and actions that  you can take to move forward in this aspect every single day for the next month.  Read a book, speak to your accountant, watch a webinar or spend some time  reviewing your statements and comparing the results to last year.

And remember to track your progress each day and find an objective person  outside of your business to hold you accountable to your plan, actions and  desired results.

Article Source: http://EzineArticles.com/6047921

That’s The Good News, Now Do You Want To Hear The Bad News?

If you do a quick search on the internet, you will uncover hundreds of experts, coaches, accountants, journalists and government organizations that quote the statistic “8 out of 10 business fail in the first year”. However, the fact that the statistic is widely touted doesn’t necessarily mean that it’s true or backed up by empirical evidence.

So what is the truth? I searched the internet and couldn’t find confirmation of any study that was done to back-up this statistic (that 8 out of 10 businesses fail) by a reputable or well-known bureau. What I did in fact find was some evidence to the contrary. According to credit reference checking agency Veda Advantage, only a small percentage of new businesses close in their first 12-months of business.

What is the exact amount, you ask? Would you believe, less than two percent?

However, they assert another 32 percent close their doors between their second and fifth year of operations, while 21 percent wind up between the sixth and ninth.

So, that is the good news. However, as you can probably guess, it’s not ALL good news.
Just because a start-up doesn’t go under in the first 12 months, doesn’t mean that the owner is running a successful enterprise. I wonder if anyone has bothered to measure how many of the businesses who survived:

• Paid the owner a wage that was at least equivalent to what he/she could have earned elsewhere as an employee?
• Generated a profit and positive cash flow? and
• Had enough working capital to service their debt, pay taxes and suppliers etc. as they came due?

The first few years of business are incredibly risky. In working with hundreds of business owners, we have found that the large majority opt to forgo their salary or inject more equity to prevent them from going under prematurely. What this means is that, while they may not have “technically” gone under, these fledgling enterprises are far from commercially viable and successful.

Statistics can be both helpful and misleading at the same time. It is easy to assert figures but more difficult to substantiate their veracity or explain the implications thereof.

The author of an article or press release will often use statistics to capture your attention and motivate action. That’s why people use statistics – numbers are persuasive and have an aura of authority.  A statistic like – 8 out of 10 businesses fail – gets attention, doesn’t it?  Whether this data is accurate or not, is only half the story. As a business owner or manager, we must look deeper to find the insights that we can take away and use to improve our results.

Personally, I don’t care what percentage goes under. No matter how long you’ve been operating, if you’re not getting paid a salary, producing profit and generating positive cash flow, you’re not running a successful company. Closing your doors is only half the story. The doors may very well be wide open, but technically, no one is there.

Rhondalynn Korolak, Author of Financial Foreplay® and On The Shoulders of Giants

Discipline and attention to details is more important than ever if you want to succeed in challenging economic times. Take a look around… competitors are closing their doors – which means more potential customers for the businesses that DO survive. And in times like these, it’s going to take more than “thinking outside the box” and goodwill with existing customers to secure the survival of your business.

You may have been lucky over the past few years – you may have found it possible to operate without a detailed, written plan and systems/processes. But the global economic crisis has changed all of that. If you want to thrive, there is only one thing that is for sure – uncertain times call for deliberate decisions and proven practices.

So here are & top tactics to recession-proof your business.

Read More

Rhondalynn Korolak, Author of Financial Foreplay® and On The Shoulders of Giants

The restaurants and promenades in the Docklands (Melbourne) were packed on Monday, night with couples. It was after all Valentine’s Day – the day when everyone declares their undying love for each other… well, at least their “commercial love”.

Apparently, if NAB has anything to do with it, February 15^th is now the official day of the year to break off a bad relationship – the “unValentines Day”. I wonder how long it will take for chocolatiers, greeting card companies and florists to create some products to commemorate this special occasion?

The obvious question that no one seems to be asking is “why was the NAB dating both the ANZ and CBA in the first place?”

Read More